The swine flu outbreak could have a "devastating" impact on parts of the pig and food industries, with even agribusiness giants such as Cargill at risk of damage, Fitch has warned.

The disease's growing spread is "likely to escalate" consumer concerns over eating pork and eating at restaurants, the ratings agency said.

Government clampdowns and export bans will deal a second blow to companies involved in the pig production chain, hurting US pig and pork prices.

"Lower pork demand will also lead to lower hog production, causing a further decrease in demand of animal feed, which may negatively impact farmers and the agricultural processors," Fitch said.

"The financial implications could be devastating for certain companies."

Credit metrics weakening

The report, which focused on the impact to the US, placed Smithfield Foods "as most at risk", given its relatively large debts and place as America's largest pork processor, with a 30% market share.

However, Fitch said it may cut ratings changes on giants such as Archer Daniels Midland, Bunge and Cargill if the swine flu outbreak proves sufficiently persistent.

"Credit metrics for these companies are currently strong but were already expected to weaken in 2009 due to a slowdown in earnings," the ratings agency said.

"All three companies are soybean processors that can be negatively impacted by slower animal feed demand."

Cargill's Excel operation also has a 10% share of the US pig processing market, with Tyson Foods' share estimated at just below 20% and Hormel Foods' at 8-9%.

Stock reaction

Smithfield Foods stock has already been amongst the worst affected by the outbreak, falling 11.2% during the first three days of the week.

Tyson shares have lost 6.3% and Bunge 1.4%, with Hormel inching 0.6% ahead and Archer Daniels shares up 3.0%.